Wage garnishment is a legal procedure in which a portion of a debtor's earnings are withheld by his or her employer to repay creditors. Garnishment is a fairly severe consequence and is usually used only when an employee is seriously behind on his or her debts.
Debts that may be repaid through wage garnishment include:
- Back taxes
- Child support
- Student loans
- Personal loans
- Judgments from court cases
- Back rent or rental property damage
How Does Wage Garnishment Work?
No matter how far behind a debtor is on his or her debt, the creditor may still have to schedule a hearing with a court. In most jurisdictions, the debtor has to be notified of the hearing's time, date, and place. The creditor must then prove that the debtor owes money and that the debtor has failed to make the required payments.
If the court is convinced, it will issue an order requiring the debtor's employer to withhold a certain amount of his or her paycheck, along with a letter and specific instructions for the employer. The employer usually has to notify the debtor in writing that wage garnishment is about to start before sending payments directly to the creditor in question. The wage garnishment then typically continues until the debts are paid off.
Wage Garnishment Protections for Employees
There are several protections in place for employees whose wages are garnished. The federal government and many states have policies in place that prevent debtors from becoming impoverished while repaying their debts. Two of the most important protections are:
- Only a certain amount of work income may be garnished. Under the Consumer Credit Protection Act (CCPA), a garnishment sought in federal court may not exceed 25% of the debtor's disposable earnings each week. See the federal wage garnishment calculator and the wage garnishment worksheet for more wage garnishment information.
- Employees cannot be fired because their wages are garnished. Federal law protects you from being fired simply because your wages are being garnished for a single debt. However, if your wages are being garnished for two or more debts, your employer may be able to terminate you.
How to Avoid a Wage Garnishment Order
The best way to avoid a wage garnishment order is to start catching up on your debt before wage garnishment happens. Unfortunately, this is not always possible. If you know you may have trouble paying all your bills on time, you should contact your creditors. Many student loan administrators have a variety of ways for you to avoid default, for example.
Child support may be modified by court order if you can show that you can no longer afford the payments. In addition, the IRS and some state tax departments can help you schedule structured payments to repay your back taxes. Some banks and other private debts may be able to work out more affordable payment arrangements.
If you're unable to work out an alternative arrangement and you see the notice for the wage garnishment hearing in the mail, don't ignore it! Attend the hearing with an attorney if possible. Bring along any documentation you may have about the debt, including proof of attempted payments and attempts to negotiate a different payment schedule, as well as proof of your income and expenses.
Filing a bankruptcy petition will pause all debt collection, except support of another person. If you were unable to attend the garnishment hearing and the garnishment takes effect, you should ask your employer for a copy of the court order. You may be able to request that the court review the garnishment order.
Have Specific Questions About Wage Garnishment? Speak with an Attorney
When wage garnishment issues arise, it can be complicated to determine how to proceed. A lawyer can help determine your rights and request accommodations so that your situation doesn't continue to worsen. Contact a local employment law attorney to learn how they can help you regain a measure of control over the situation. A local bankruptcy attorney can also work with you regarding debt.
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Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.